GE Chief Received Special Stock Award Now Worth $100 Million
March 11 2021 - 7:13PM
Dow Jones News
By Thomas Gryta and Theo Francis
Larry Culp voluntarily gave up his salary after Covid-19 struck
and also declined his cash bonus, yet the General Electric Co. boss
last year received a special stock award that at the end of 2020
was valued at more than $100 million.
Most of Mr. Culp's reported 2020 compensation came from a pair
of performance-linked stock awards: an annual grant valued at $15
million in early March and a longer-term grant in August initially
valued at $57.1 million, according to a regulatory filing Thursday.
His salary for the year was $653,409.
GE said its chairman and chief executive won't receive any of
the August stock grant until 2024 and the values of both awards
will fluctuate based on the company's performance. At year-end, the
company valued the full August award at $100.4 million, assuming
additional targets are met.
"In April 2020, in light of the business challenges and economic
uncertainty resulting from the Covid-19 pandemic, Mr. Culp
voluntarily forfeited his salary for the remainder of 2020," GE
said in its filing. Mr. Culp was entitled to a $2.5 million salary
and a cash bonus valued at up to $3.75 million, which he
declined.
Over the summer, the GE board revised the CEO's contract,
extending it until 2024 and awarding him the special stock grant
"in recognition of Mr. Culp's essential role in leading GE's
ongoing transformation," according to the filing.
The extension also reset the baseline stock price for reaching
the performance goals to $6.67. The shares were about $12 when he
took the CEO role in 2018.
GE reached its first performance goal in December, ensuring Mr.
Culp at least 4.6 million GE shares, which were valued at about $47
million at the time. He could receive up to 4.6 million more shares
if targets are met.
"Larry's compensation remains overwhelmingly tied to GE's
performance, with the performance shares targeting a significant
return to shareholders, and no performance shares will be earned
unless Larry remains with GE through the extended term of the
agreement," the company said in the filing.
Mr. Culp became the first CEO from outside of GE after deep
problems in its power unit and financial services arm forced GE to
slash its dividend and sell off businesses. He previously served as
lead director on GE's board.
https://www.wsj.com/articles/can-larry-culp-fix-ge-1538798476
Mr. Culp has focused on cutting debt and generating more cash to
turn around the conglomerate, but the pandemic hit the company hard
because of its reliance on the air travel industry. GE ultimately
cut a quarter of its 52,000 aviation workers last year.
GE shares have performed well, more than doubling in the past
six months, as investors get more confident in the company's
turnaround. This week he struck a deal to sell off a big part of GE
Capital and promised to wind down the troubled segment. The shares
closed Thursday at $12.27.
(END) Dow Jones Newswires
March 11, 2021 19:58 ET (00:58 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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